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HI, there is a problem regarding settlement discount in the question ….i am trying but my answer is not matching with the options.
QUESTION=
invoice paid in the month after sale is 60%
invoice paid in the second month after sale is 20%
invoice paid in the third month after sale is also 20%
( inclusive of 5% bad debts)
credit sales for JUNE to AUG is :
june =200000
july =300000
aug = 260000Customers paying in the month after sale are entitled to deduct 2% of settlement discount.invoices are issued on the last date of month……the amount budgeted to be received in SEP from credit sales is ????
now what i have got from this question is we have to separate the bad debt amount from each month sale amount and then net off any discount….so i have
june =200000× .95 =190000 which in the sep would be 38000 (20%)
july =300000× .95 =285000 which in sep would be 57000 (20%)
aug=260000× .95 =247000 which in sep would be 148200 (60%)
my answer is 243200….the book answer is not matching where am i doing wrong ???You need to subtract the 2% discount when arriving at the cash received from August sales.
Does not the printed answer that you have show the workings for their answer?
so the correct answer is 38000+57000+145236=240236 after deducting bad debt provision per month and the 2% discount …..??
book answers are 23030 233500 242880 246000
On the question as you typed initially it would seem that what you have written in the first line of your latest posting is correct. As it stands I do not understand what you have typed as the the book answer (and why there should be four figures).
To properly explain I need to see the actual question as printed. If it is a question from the current edition of the BPP Revision Kit then tell me which question and I will check for myself.
Actually its my examination question with four choices of which one is correct , but non of it matches with mine so i was confirming mine method of approach which it seems to be correct .
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